Anglo-Dutch supermajor Shell and Russian oil giant Gazprom Neft have edged closer to jointly exploring and developing two large remote onshore blocks on the Gydan Peninsula as they get set to seal a joint venture.
Both companies hope to complete the deal before the end of this year.
Plans for the venture were announced in June last year and have now received approval from Gazprom Neft's board.
Forming the joint venture would allow the companies to press ahead with collection of 3D seismic data and the drilling of exploration wells next year.
Each company will hold 50% in the venture, which will work on the Leskinsky and Pukhutsayakhsky blocks in the north and north-east parts of the Gydan Peninsula, together covering about 3800 square kilometres.
The Gazprom Neft board has also approved the company’s 6.2 billion roubles ($81 million) initial investment in the venture, the oil producer said in a disclosure note.
Gazprom Neft has repeatedly aired its high expectations of the two blocks' hydrocarbon potential, saying they could eventually become a major regional production centre.
Shell's Russia country chairmain, Cederic Cremers, told Russian news agency Interfax earlier this month that the supermajor had to slash drilling spending in all of its producing joint projects in Russia, and had to move some drilling and infrastructure activities into 2021.
However, Cremers implied that the reduction in spending does not apply to this joint venture project because Shell in April decided to exit from another joint initiative with Gazprom Neft, Meretoyakhaneftegaz, which had been formed to explore and and develop five blocks in West Siberia.